If everybody hates it,

splat · Nov 10, 2010

Lets see

Raise taxes -- Piss of republicans

Cut programs - piss off democrats

not like this wasn't seen coming like a train in a tunnel.

stoney · Nov 10, 2010

printed to read tonight. SOunds good from my current breeze through.

rockofullr · Nov 10, 2010

Smart ideas. Never gonna happen.

KavuRider · Nov 10, 2010

dante said:
Actually, I'm not quite sure how much "raising taxes" there is in it. Under the "keep all deductions the same" the top marginal tax rate goes from 35% (currently, or 39.5% next year) down to 28%. It seems like the people who are going to get screwed on higher taxes are the middle class, who (might) see some of the mortgage and child deductions go away...

(under the "keep all deductions the same", middle-income Americans also get a reduction in marginal rates as well)

I'm not crazy about getting rid of the mortgage deduction - its really the only one I have.

The other stuff - sounds good.

Edit: nevermind, actually reading the proposal, they want to limit the deduction to your primary residence, no Helocs and nothing over $500K - I'm A-OK with that!

Some really good stuff in there - too bad it probably won't happen...

mandown · Nov 12, 2010

Tax deduction for owning a house and paying mortgage interest was the government's way of creating an incentive for people to buy property, not a god-given right of the people. Now that buying homes seems to have played a major part in the economy of the US taking a dump, I can see why they might think about removing that incentive (not that I agree or disagree with doing it).

As a guy living in Los Angeles, I'm not thrilled with the $500,000 number, since finding a home here in a neighborhood I would consider living in doesn't leave you with an abundance of options below that price. Though, I have almost committed myself to being a life-long renter.

stoney · Nov 12, 2010

I'm with MD on this one. The fact that the government uses blanket hard dollar numbers for deductions and tax brackets is illogical. If I make the same amount as an auto worker, but live in a location that is 5x more expensive, why am I being penalized?

stoney · Nov 12, 2010

My issues are more with select privileges. I don't own a home, I don't have children, and I would be setting aside the amount I currently do for retirement, so ex-retirement perks, why am I being penalized?

Secret Squirrel · Nov 12, 2010

The Joker said:
I'm with MD on this one. The fact that the government uses blanket hard dollar numbers for deductions and tax brackets is illogical. If I make the same amount as an auto worker, but live in a location that is 5x more expensive, why am I being penalized?

"Because the free market will sort it all out. If you want more, work harder."

[/Joker]

mandown · Nov 12, 2010

The market will work better if the govt doesn't change the rules mid game. The feedback loop needs more time.

KavuRider · Nov 12, 2010

Secret Squirrel said:
"Because the free market will sort it all out. If you want more, work harder."

[/Joker]

mandown · Nov 12, 2010

There is an inherent problem with being such a young, large country, lacking in a unified culture (salad bowl vs. melting pot), in that creating federal tax incentives for a diverse constituency is gigantically complex. Forget the fact that housing costs and state tax rates swing wildly from coast to coast, and just watch an episode of Ice Road Truckers or Swamp People and realize how different the citizens of this country are in regards to how they make a living and the quality of life they seek and accept. The recent news has shown that Germany has had ruffled feathers over US policy, and pointed out that the German culture is one of saving and careful spending. While there isn't a "uniform" German, the quantity and variety of citizens are much different from the US, and they have had a much longer fermentation time as a culture, making it easier for the government to tweak certain parameters.

Hunter S Thompson nailed "The American Dream" in Fear and Loathing, describing the get-rich-quick of Vegas as the mindset of the country. While it is the responsibility of the government to regulate certain parameters, the economy of recent years and the related revisions to the tax law feel like panic responses to a bad roll of the dice.

Toshi · Nov 12, 2010

The Joker said:
My issues are more with select privileges. I don't own a home, I don't have children, and I would be setting aside the amount I currently do for retirement, so ex-retirement perks, why am I being penalized?

Start contributing to society and we'll talk

:rofl:

stevew · Nov 12, 2010

mandown said:
German culture

german culture....

will this be big in berlin?

Toshi · Nov 12, 2010

My rambling take on it, Cliffs Notes at bottom:

Page 2: Mentioning "health care savings," "other mandatory savings," and "Social Security adequacy and solvency" is a necessary first step but does nothing to solving the purely political problems that must be solved in order to restore solvency to the elephants in the room: Medicare and Social Security. Discretionary spending cuts, mentioned at the top of their slide, are small potatoes in comparison.

Page 6, point 7: cutting defense spending! Hallelujah. Although the example of Britain gives me some scant hope I can't think of any modern American politician aside from the always outspoken Ron Paul who has actually advocated for defense spending reduction. Further down in the same point, and also in point 9 on page 7 I see mentioned goals of a govt spending AND revenue goal/cap of 21% GDP. Why 21% GDP? Is this some right-wing economist's misapplication of some theory at work? Was this pronounced as divine law from above? Anyway, perhaps we'll see more justification of this figure later. For now it's voodoo.

Page 8: $200B savings by 2015, ok, great. Why the hell are we talking about "dramatically reducing [tax] rates" right after this? I thought this was about REDUCING the deficit, not increasing it. Wow. I can only imagine what voodoo economics allow the sentence about dramatically reducing tax rates to terminate in "reduces the deficit."

Page 17: Their recommendations for how to apply caps would be great if actually implemented, sort of like freezing the credit cards in a block of ice as espoused by some financial "gurus." However, the chances as I foresee them for such stringent rules actually being applied and adhered to are approximately 0. This is not a bunch of reasonable adults we're talking about: this is the House and the Senate, filled with partisan vitriol and congressmen and -women who are out to maximize return for their particular district or state, not to look out for the welfare of the nation as a whole.

Page 19: no pay raises (not even COLA) for noncombat military personnel for 3 years? Yeah, I don't see that one happening. Reduction in overseas bases by 1/3? Good idea, but again not going to happen anytime soon. "Modernize Tricare, Defense health" is codeword for increasing premiums and reducing costs, ie, reducing covered medical expenses. Probably a good idea but absolute political suicide to support--who wants to be seen as being "against veterans"?--so isn't going to happen, either.

Page 24: "The Zero Plan" tax plan. I'm all for treating capital gains and dividends as ordinary income, and eliminating the mortgage interest reduction and EITC, but eliminating the tax breaks for retirement and health benefits would be a very, very tough sell. Seniors groups will hear nothing of it and, for better or worse, our politicians are beholden to seniors groups because they get out and vote reliably.

Page 25: Their tax plan seems to benefit the rich way more than the bottom 80%. No surprise. Why should we support this? It will only serve to create further increases in income inequality, which are already pretty egregious here in the US.

Page 26: I like this alternative tax plan a lot better: increasing the standard deduction, capping the mortgage deduction and excluding second residences and home equity loans.

Page 29: raise the gas tax. YES. DO IT. DO IT NOW. Unfortunately, not going to happen for political reasons: political suicide, this.

Page 31: "Pay doctors and other providers less." We shall shoulder the burden, apparently, and the govt can make this happen since Medicare is such a large player in the market. "Pay lawyers less"--how exactly will the govt exert any influence on this? Tort reform, as suggested? I don't think this will make half a dent in lawyers salaries. Higher co-pays and co-insurance costs in Medicare, sure, but this is probably going to be a very regressive burden, and would be fought tooth and nail from all sides. Basically this is a bunch of wishful thinking and handwaving regarding medical cost curbs, not actual things to do now to solve our very real problem.

Page 35: "Cut Federal Spending on Graduate and Indirect Medical Education." Huh? That money is used to train people like me, medical residents. If we're not trained then there'll be (even more) of a doc shortage in the future and those of us still practicing will demand higher rates for our now-scarcer services. This does not seem like a good way to either cut costs or invest in the future at all.

Page 36: I like the idea of an automatic trigger for higher rates and, especially, a public option in the health insurance exchanges. However, given the extreme difficulty that President Obama had passing even his pretty-weak health reform bill, I don't think Republicans or the angry mob of Tea Partiers would have any of this idea, even if it's for the good of the country.

Page 37: reduced farm subsidies! Yes! Happening any time soon? No!

Page 38: eliminate the subsidized Stafford program by which the Federal govt covers interest payments while one is still in school? How petty is that? I suppose it'd be easier to pass since students have a weaker lobby than, say, the AARP. I don't think radically changing the formulae for the pensions of military and government employees would be politically feasible, however, not to mention that those very pensions were probably a big reason of why said employees stuck with a government job instead of chasing greener pastures in the private world. Changing the rules after the fact is unfair.

Page 45: Social Security retirement age increases and increase in the progressivity of benefits (that is, decrease in benefits for those over the 50th %tile in income) are both fine by me but won't fly with either Democrats (AARP lobby) or Republicans (AARP lobby again, as well as mentally deficient Tea Party types who don't associate SS or Medicare spending with the government).

Page 46: Increase payroll tax taxable minimum. Yes. Probably not too politically contentious, even!

Page 47: the suggestion that people don't save for retirement for lack of education is laughable. People don't save for retirement on their own because they're short-sighted schmucks by nature (or are simply poor), and no amount of nanny-like finger-wagging from the government will change that.

Conclusion/Cliffs Notes

Ok, that's where it ends, which is fine since I was growing tired of reading it, anyway. I think that some of its suggestions are great ones. However, most of them are completely politically infeasible and some of them--the "Zero Tax" tax plan in particular--would be frankly counterproductive, in my opinion. I think that nothing substantive will change until we face a real crisis, and while the world still buys our Treasury bills for basically nothing when compared to inflation we'll continue to see much of the same: lots of hot air about the deficit but nothing actually done to curb it to any great degree.

ohio · Nov 14, 2010

Toshi said:
My rambling take on it, Cliffs Notes at bottom:

They commission wrote this knowing that it was a political impossibility. Maybe they did that knowing it absolved them of responsibility to pursue it, or maybe they did that because starting with (roughly) their ideal, is the easiest place to begin the conversation. Hard to say which, but at minimum the idea of 3:1 deficit reduction is catchy and seems within remote political feasibility to me.

Toshi said:
Page 35: "Cut Federal Spending on Graduate and Indirect Medical Education." Huh?

Oh, so you're all for deficit reduction, as long as it doesn't effect YOU? I see how it is...

Toshi · Nov 15, 2010

Before this commission I'd never heard anyone complain about the cost of graduate medical education to the country...

mandown · Nov 15, 2010

dante said:
Keep in mind that that's a $500k *mortgage*, so if you're responsible and have 20% to put down you're looking at a $600k house.

btw, the math is wrong. $600k house w 20% down = $120k down, or a $480k loan. you need to divide the loan of $500k by 80% to get the house value = $625k :thumb:

ohio · Nov 15, 2010

Time to put your money where your mouth is, with dollars that reflect reality:
http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html

I actually achieve a massive governmental surplus (which I would adjust down to a mild surplus with lower taxes spread progressively across income brackets), while keeping the Bush Era tax cuts in place:
Share Your Plan on Twitter or share this link: http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=h3y7fb16

Pro-tip: if you aren't willing to touch defense, Medicare, and Social Security, getting all blue in the face over earmarks and public employees won't do you much good.

Silver · Nov 15, 2010

ohio said:
Time to put your money where your mouth is, with dollars that reflect reality:
http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html

I actually achieve a massive governmental surplus (which I would adjust down to a mild surplus with lower taxes spread progressively across income brackets), while keeping the Bush Era tax cuts in place:
Share Your Plan on Twitter or share this link: http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=h3y7fb16

Pro-tip: if you aren't willing to touch defense, Medicare, and Social Security, getting all blue in the face over earmarks and public employees won't do you much good.

Here's mine:

http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=43x356n0

MikeD · Nov 15, 2010

mandown said:
While there isn't a "uniform" German

Bernhard here disagrees.

If everybody hates it,

Unabomber

Nam I am

Part of the unwashed, middle-American horde

confused

Unabomber

Turbo Monkey

Unabomber

Poopdeck Repost

Part of the unwashed, middle-American horde

Unabomber

Part of the unwashed, middle-American horde

There is no Justice!

Poopdeck Repost

Turbo Monkey

Unabomber

Poopdeck Repost

butthole powerwashing evangelist

resident influencer

Unabomber

butthole powerwashing evangelist

The Fresno Kid

butthole powerwashing evangelist

Poopdeck Repost

The Fresno Kid

find me a tampon

Leader and Demogogue of the Ridemonkey Satinists